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Financial Terms | |
Dividend income |
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Definition of Dividend incomeDividend incomeincome that a company receives in the form of dividends on stock in other companies that it holds.
Related Terms:Accrued Incomeincome that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Adjusted Income from ContinuingOperations Reported income from continuing operations Book IncomePretax income reported on the income statement. Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations ![]() common-size income statementincome statement that presents items as a percentage of revenues. constant-growth dividend discount modelVersion of the dividend discount model in which dividends grow at a constant rate. Cum dividendWith dividend. Cumulative dividend featureA requirement that any missed preferred or preference stock dividends be paid Current Income Tax ExpenseThat portion of the total income tax provision that is based on Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Discounted dividend model (DDM)A formula to estimate the intrinsic value of a firm by figuring the Disposable Incomeincome less income tax. DividendA dividend is a portion of a company's profit paid to common and preferred shareholders. A stock ![]() DividendA payment a company makes to stockholders. Earnings before income tax. The profit a company made DividendThe payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period. DividendA payment made to shareholders that is proportional to the number of shares dividendPeriodic cash distribution from the firm to its shareholders. DividendAs the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by Canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other income. DividendUnlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus. Dividend clawbackWith respect to a project financing, an arrangement under which the sponsors of a project Dividend clienteleA group of shareholders who prefer that the firm follow a particular dividend policy. For dividend discount modelComputation of today’s stock price which states that share value equals the present value of all expected future dividends. Dividend discount model (DDM)A model for valuing the common stock of a company, based on the dividend growth methoda method of computing the cost ![]() Dividend growth modelA model wherein dividends are assumed to be at a constant rate in perpetuity. Dividend limitationA bond covenant that restricts in some way the firm's ability to pay cash dividends. Dividend payout ratioPercentage of earnings paid out as dividends. dividend payout ratioComputed by dividing cash dividends for the year dividend payout ratioPercentage of earnings paid out as dividends. Dividend policyAn established guide for the firm to determine the amount of money it will pay as dividends. Dividend PolicyThis policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class. Dividend rateThe fixed or floating rate paid on preferred stock based on par value. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Dividend rightsA shareholders' rights to receive per-share dividends identical to those other shareholders receive. Dividend yield (Funds)Indicated yield represents return on a share of a mutual fund held over the past 12 dividend yield ratioCash dividends paid by a business over the most Dividend yield (Stocks)Indicated yield represents annual dividends divided by current stock price. DividendsAmounts paid to the owners of a company that represent a share of the income of the company. DividendsProfits paid out to shareholders by a corporation. Dividends per shareAmount of cash paid to shareholders expressed as dollars per share. Dividends per sharedividends paid for the past 12 months divided by the number of common shares earned incomeEarned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits. earnings before interest and income tax (EBIT)A measure of profit that Economic incomeCash flow plus change in present value. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Ex-dividendThis literally means "without dividend." The buyer of shares when they are quoted ex-dividend Ex-dividend dateThe first day of trading when the seller, rather than the buyer, of a stock will be entitled to ex-dividend dateDate that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend. Extra or special dividendsA dividend that is paid in addition to a firm's "regular" quarterly dividend. Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a Homemade dividendSale of some shares of stock to get cash that would be similar to receiving a cash dividend. IncomeNet earnings after all expenses for an accounting period are subtracted from all Income beneficiaryOne who receives income from a trust. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Income from Continuing OperationsAfter-tax net income before discontinued operations, Income fundA mutual fund providing for liberal current income from investments. income fundsMutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares. Income SmoothingA form of earnings management designed to remove peaks and valleys Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. INCOME STATEMENTAn accounting statement that summarizes information about a company in the following format: Income StatementOne of the basic financial statements; it lists the revenue and expense accounts of the company. income statementFinancial statement that summarizes sales revenue Income statementA financial report that summarizes a company’s revenue, cost of income statementFinancial statement that shows the revenues, expenses, and net income of a firm over a period of time. Income statement (statement of operations)A statement showing the revenues, expenses, and income (the Income StatementsA financial statement that displays a breakdown of total sales and total expenses. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Indicated dividendTotal amount of dividends that would be paid on a share of stock over the next 12 months information content of dividendsdividend increases send good news about cash flow and earnings. dividend cuts send bad news. Interest incomeincome that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies. Investment incomeThe revenue from a portfolio of invested assets. Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Liquidating dividendPayment by a firm to its owners from capital rather than from earnings. MM dividend-irrelevance propositionTheory that under ideal conditions, the value of the firm is unaffected by dividend policy. Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. National IncomeGDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP. National Income and Product AccountsThe national accounting system that records economic activity such as GDP and related measures. Net incomeThe company's total earnings, reflecting revenues adjusted for costs of doing business, NET INCOMEThe profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales. Net incomeThe last line of the income Statement; it represents the amount that the company earned during a specified period. Net incomeThe excess of revenues over expenses, including the impact of income taxes. net income (also called the bottom line, earnings, net earnings, and netoperating earnings) Operating incomeThe net income of a business, less the impact of any financial activity, Operating IncomeA measure of results produced by the core operations of a firm. It is common Perfect market view (of dividend policy)Analysis of a decision on dividend policy, in a perfect capital Permanent Income HypothesisTheory that individuals base current consumption spending on their perceived long-run average income rather than their current income. Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. RATIO OF NET INCOME TO NET SALESA ratio that shows how much net income (profit) a company made on each dollar of net sales. Here’s the formula: Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |